Hey everyone! This is a theory of the plot of FNAF 1 & 2. The original theory was posted by a 'Horrorfangal' on the wiki. The 'Phone Guy not being a Guard' theory was by 'Ballon Boy'. I edited it to fill in any holes or mistakes. Enjoy!
A long long time ago in a galaxy far far away there was Fredbear's Family Diner. It featured 4 Animatronics (3 that were immobile like chucky cheese stage style (Foxy, Chica and Bonnie) and Freddy which could also perform simple tasks) and 1 employee worn suit (Golden Freddy). The phone guy speaks fondly of the characters on Night 2 of FNAF2 so it's obvious that the old characters already have an established history either from when he was a child or because he's been with the company so very long. One day at a birthday party when Freddy was on free-roam giving out cake to the children, a child from the party steps outside to wait to be picked up by their parent(s). After some time when they don't show, the child begins to cry. A stranger drives up and during the distraction of the party inside, kills the child. The murderer is "the purple man." (All of this is shown in the Save Him/Take Cake minigame. I also think the slow moving of Freddy is to symbolize that the animatronic is the only one that sees the crime and is torn between his duty to the children of the party and his programming to care for children, but that's just my view.) The reputation of Fredbear's is ruined by the incident, the place is left to basically rot (and the animatronics with it), and eventually they go bankrupt and are bought out by another company.
Fazbear's Entertainment (in which Phone Guy is a mechanic or a boss) is created as the branch in charge of the new account, keeping the nostalgia of the old characters but wanting to distance themselves from the child who was murdered (and led to the downfall of the old location) they spend a "small fortune" on a new location with a modern sleek look (which is why it's noted by the phone guy that there are no doors. That is odd regardless of the place in FNAF1; an office with no doors is just weird, period.), and after realizing the condition of the animatronics after being left to rot and mildew (hence the smell reference by the phone guy), they stop the work they have already begun (giving the old animatronics the ability to roam around and the updated programming letting it detect faces, etc). They then proceed to design and roll-out the new animatronics (the Toy variations). They then advertise for employees and begin to open up shop. Original Night Guard (ONG) are then hired; little did they know ONG is actually the purple man who applied because he saw an opportunity to kill again. A new animatronic arrives (this is pure speculation on my part), a crying Puppet inside a jack-in-the-box. It uses audio cues to wander when a room is silent, lifting out of it's box and appearing to be analyzing. The phone guy sees this and is unnerved by the puppet and it's constant "thinking". Because they hadn't planned on having another animatronic, they stick it in the prize section and leave it there to it's own devices. Normally it is dormant from the constant bustling activity of children redeeming tickets. The puppet (that looks like the child from the Take Cake mini-game) is haunted by the soul of the first victim (outside of the party). During one day of roaming at night, it sees the man who killed him and begins to plot revenge. During the course of a week the puppet begins to reprogram the animatronics using the minigames we play when we die. For example, it programs Foxy that the purple man causes it to no longer get it's joyful response when it leaves the staging area because the purple man kills the children, so they can't cheer. It's teaching the animatronics what the purple man does. As the week plays on, ONG grabs children, kills them, then stuffs them inside suits and smuggles the bodies out using them, and the puppet watches it happen. When he realizes his killer has returned, the puppet teaches the souls of the murdered children how to use the old robots to move like he does. That's why they are able to move when they shouldn't be able to. ONG is then attacked by the animatronics, barely surviving, and relates the entire story to the management and Phone Guy, and demands to be moved to the dayshift. They then Hire "You", Jeremy.
By this point, New Foxy has become too hard to maintain and is now the hands-on attraction in Kid's cove. The old robots are still being used for parts but are now possessed by the souls of the new victims, and the new Toy robots are reprogrammed by the puppet. Now, in order for the plot to progress in the game you would have had to have never died, which means you never messed up and let the puppet out, so the puppet can't tell the robots that ONG is no longer the night guard, that "you" have replaced him. The new robots keep looking for the purple man (ONG), who barely survived by putting on an empty Fazbear head. He knows the robots are programmed to detect child predators, so rather than let the company know why the robots are -really- after him, he makes up an elaborate lie about why they attacked and with the information he gives them and the debugging the programmers run, they come up with the "maybe they think you're an endoskeleton breaking the rules" theory. The managers then tell "you" about how to use the head to survive, which you do for the entire week. Because the puppet never wakes and the robots never see you without the head, no one knows you are a different security guard, so they proceed to keep trying to get to ONG, not knowing he now works the days. The puppet has programmed the robots and told the ghosts of the children their killer is the security guard, and inside their programming the animatronics see that security guard as the purple man. The week progresses with you working the nightshift and ONG working the dayshift and continuing to accumilate victims. Children go missing, parents file reports and accuse the company, but no one can find any proof. Phone guy assures you it's all just rumors and people trying to make a buck because he is truly loyal to the company and the dayguard (ONG) is telling everyone he saw no child that matches the description that the parents are filing (the children he himself killed), and the company believes him.
It's now night 4. The accusations are accumilating, ONG is scared for his life during the day and decides to tamper with the robots so they stop following him, concerned he'll get caught or hurt, possibly worse. Before the end of his shift, the police enter the Pizzaria. He flees the premises, and the police begin a formal investigation, causing the company to close down for a few days. Night 5 proceeds, the "day shift" is now completely vacant because ONG has fled, and he is not allowed on premises. No one is allowed into the building while the police continue to investigate and because of ONG's tampering, the robots can no longer tell who is the purple man. They only remember that the man who wronged them is a security guard.
And so Night 6 begins. Police have discovered through camera footage that ONG lured children using the old employee suit from location 1 (Golden Freddy) to the back rooms into blind spots. They have been unable to find the bodies, but now know that 5 children are missing. (The newspaper clippings from FNAF1 are the explanation of the events of this week). "You" make it through the night and are then told to help them with the birthday party the next day. The robots are beyond aggressive now, and during the party they see you in your uniform (as you were told specifically to wear). Toy-Foxy crawls up to the ceiling and attacks you, seeing you as the purple man, destroying Jeremy's frontal lobe, and prompty ending the birthday party and any chance of the company staying in the black (financially) for that year.
The company then sells the larger location and moves back to Fredbear's (the location in FNAF1). Because of the violence enacted by Toy Foxy (Mangle), they scrap the new animatronics completely, repair the old robots (which as you recall were updated with the new roaming servos and facial recognition) and use them as the attractions at FNAF1. Things start out normal with Phone guy taking the night shift so they robots can roam. The robots see Phone guy in his uniform, and the programming begins to kick in (Cutscene 1 from FNAF2, the robots looking concerned at one another.) They then begin to plot (Cutscene 2), and finally the programming fully boots up with them remembering the incident of the Golden Freddy murders (Cutscene 3). This reawakens the puppet's ghost (the very first victim) who then appears to the animatronics (Cutscene 4) and enacts his revenge, killing Phone guy on Night 4 (which is why there are no more cutscenes past night 4 and no more phone calls either). The Animatronics are now completely active and murderous, no longer able to tell the difference between ONG and any security guard.